Innovation and Technology

There’s no better way to see the power of manufacturing than by visiting a facility—which is why the NAM brought its Competing to Win Tour to INCOG BioPharma Services’ new state-of-the-art facility in Fishers, Indiana, yesterday.

A delegation including NAM President and CEO Jay Timmons, Sen. Todd Young (R-IN), Fishers Mayor Scott Fadness and INCOG BioPharma Services President and CEO Cory Lewis toured the company’s brand-new facility and discussed the importance of advanced manufacturing.

The tour: The NAM’s Competing to Win Tour is a nationwide event that highlights critical issues facing manufacturers in the United States.

• Designed to raise awareness around manufacturing opportunities—and foster conversation between local manufacturers, employees, media, community leaders and elected officials—the Competing to Win Tour kicked off this year with the NAM State of Manufacturing Address from Timmons at Husco’s headquarters in Waukesha, Wisconsin.

The host: INCOG knows firsthand about the challenges and opportunities in modern manufacturing. Founded in 2020, the company is a contract development and manufacturing organization that provides a wide range of pharmaceutical services, including drug development, clinical trial manufacturing and commercial manufacturing.

• In their new cutting-edge facility, which just opened last May, the company is creating sterile injectables and assembling devices to help their customers bring new drug products to market.

The panel: As part of the event, Timmons moderated a conversation between Sen. Young, Mayor Fadness and Lewis on the challenging environment facing manufacturers and the urgent need for solutions on issues like permitting reform, workforce development and tax policy.

• Young highlighted crucial investment in semiconductor manufacturing, saying, “We’ve just passed what is really a historic piece of legislation called the CHIPS and Science Act that will invest in emerging technologies that will define the 21st-century economy.”
• Meanwhile, Lewis discussed the importance of R&D to his company, in the context of a larger discussion about the R&D tax credit. He said, “My perspective is R&D is critical … there’s a lot of activity that happens on the R&D side, a lot of momentum that’s required to get that through.”
• Mayor Fadness talked about the importance of introducing students to manufacturing early on, saying, “I think there are opportunities to really tie [in] those connections [to manufacturing] from K through 12. I think we need to start younger and tie them back to this facilities and leaders like Cory at INCOG.”

Manufacturing has a leading role in the U.S. economy—but there is still a great deal more to do. That was the message at this year’s NAM State of Manufacturing Address from NAM President and CEO Jay Timmons.

Timmons spoke to a gathering of manufacturing team members and the media at Husco in Waukesha, Wisconsin. In his remarks, he laid out the NAM’s view of where the industry is and where it’s going.

The program: The event began with a message from Kurt Bauer, president and CEO of Wisconsin Manufacturers & Commerce, followed by an introduction from NAM board member Austin Ramirez, president and CEO of global engineering and manufacturing company Husco.

• “Wisconsin manufacturers contribute to the vitality of our state through their innovation, productivity and commitment to customer satisfaction,” said Bauer. “While we face many challenges, we are also in the enviable position of controlling our destiny—as long as we work together to create a shared vision of prosperity and an action plan to achieve it.”
• “We are here to shine a light on the amazing, life-changing work that manufacturers do every day,” said Ramirez. “We are the backbone of the American economy, and we are proud of it.”

The state of manufacturing: Timmons spoke about Russia’s invasion of Ukraine, the importance of the manufacturing industry’s support for the Ukrainian people and the larger struggle between freedom and tyranny.

• “Despite everything happening around us, like the threat of a recession and global conflict, manufacturers are still leading the way forward,” said Timmons.
• “And although our industry and our country will need to make audacious and sometimes uncomfortable changes to adapt to economic, political and global challenges … I’m confident in reporting that the state of manufacturing in America remains steadfast and resolute.”

Manufacturing solutions: Timmons cited a variety of manufacturing challenges, then detailed the NAM’s plans to fight for manufacturers across the United States.

• Supporting immigration: “For so many manufacturers in America right now, there are more open jobs than there are people to fill them,” said Timmons. “One of the many ways we fill those jobs and keep our economy moving is welcoming immigrants into our workforce … just like we have in the past to build a stronger, more prosperous America.”

• Promoting permitting reform: “Permitting reform means making it easier to get permission to build that new road or power plant, or for manufacturers to build new facilities,” said Timmons. “If Washington could just cut through the bureaucracy and streamline processes, like you do in your businesses every single day, we could do more for this country.”

• Fighting for tax fixes: “The NAM is determined to get Congress to restore incentives for R&D and get our business tax rates and structure back on track to enable us to compete globally,” he said. “And then, let’s lock in competitive rates for small businesses … so that you can plan confidently for the future.”

• Competing with China: “If we’re going to counter China, then we must hold China accountable for the trade commitments it has already made to the U.S.,” said Timmons. “And we have to forge ambitious, cutting-edge trade agreements with our allies. Other countries aren’t waiting around. So, let’s think big. And let’s be bold.”

• Pushing back on new EPA rules: “We’re going to tell the EPA that manufacturers are already leading [in cleaning] our air,” said Timmons. “The government shouldn’t enact rules that, however well-intentioned, would make it more difficult to achieve our environmental goals, slow our economic growth and push us closer toward recession.”

The last word: “History shows us that as long as manufacturers lead the way, America and our democracy will remain that beacon of freedom and hope for people around the world,” said Timmons. “Manufacturers have been, and always will be, in word and deed, the arsenal of democracy. And working together, I know we will keep making this a manufacturing decade.”

Washington, D.C. – With the number of manufacturing job openings in the United States averaging 830,000 per month over the past year, the National Association of Manufacturers and the Manufacturing Institute have partnered with FactoryFix to launch and power Creators Connect, a new digital career resources platform designed to help students, parents, career influencers and job seekers easily explore and pursue the wide range of pathways available in modern manufacturing.

“Addressing the workforce crisis is among the top concerns for manufacturers across the country,” said NAM President and CEO and Manufacturing Institute Board Chair Jay Timmons. “While we cannot fully solve this challenge without immigration reform, manufacturers are determined to lift up more people in the United States with the promise and reward of modern manufacturing careers—and Creators Wanted’s new digital career resources platform is another way that manufacturers are leading with solutions.”

Creators Connect is the first and only unified platform to search and explore career pathways, job openings and job training programs across the entire manufacturing industry while making it easier for manufacturing professionals to attract and identify talent to fill the skills gap.

“We’ve made tremendous strides in inspiring a new generation of manufacturers at the Manufacturing Institute and across the industry, but what’s been missing is a single resource for manufacturing jobs and pathways opportunities,” said MI President Carolyn Lee. “Today, we bring an unmatched tool—in terms of volume and quality of jobs—to help us close the skills gap and change more misperceptions about modern manufacturing.”

Creators Connect is live on CreatorsWanted.org, home of the NAM and MI’s Creators Wanted campaign, which is the largest industry campaign to build the workforce of today and tomorrow. Since 2021, Creators Wanted has built an email network of more than 1 million students, early career entrants and potential career influencers. FactoryFix is already the leading manufacturing recruitment platform in the U.S., hosting more than 400,000 job openings and having its own talent network of more than 650,000 manufacturing workers. The partnership is the first of its kind for the industry’s largest and oldest manufacturing trade association.

“It’s an incredibly exciting opportunity for FactoryFix to be the engine behind Creators Connect and a part of the Creators Wanted campaign,” said FactoryFix CEO and Founder Patrick O’Rahilly. “As a one-stop recruiting solution for manufacturers to find qualified and engaged candidates, we’re looking forward to increasing our impact in addressing the labor shortage and helping more Americans create their future in modern manufacturing.”

By powering Creators Connect, FactoryFix representatives will join the NAM and the MI’s Creators Wanted workforce campaign as it continues its roadshow in 2023 and expands its digital campaign across the United States. By 2025, Creators Wanted aims to recruit 600,000 new manufacturing team members; increase the number of students enrolling in technical and vocational schools or reskilling programs by 25%; and increase the positive perception of the industry among parents and career influencers to 50% from 27%.

To explore Creators Connect, visit CreatorsWanted.org.

-NAM-

The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs more than 12.9 million men and women, contributes $2.81 trillion to the U.S. economy annually and accounts for 55% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit nam.org.

-Manufacturing Institute-

The MI grows and supports the manufacturing industry’s skilled workers for the advancement of modern manufacturing. The MI’s diverse initiatives support all workers in America, including women, veterans and students, through skills training programs, community building and the advancement of their career in manufacturing. As the workforce development and education partner of the NAM, the MI is a trusted adviser to manufacturers, equipping them with resources necessary to solve the industry’s toughest challenges. For more information on the MI, please visit https://www.themanufacturinginstitute.org.

-FactoryFix-

FactoryFix is the leading recruitment automation solution for manufacturing companies, combining the power of a talent network with specialized recruitment technology. Our platform helps HR manufacturing teams save time and budget by automating tedious tasks, streamlining recruitment efforts and providing a consistent flow of engaged candidates.

Founded in 2017 in Chicago, Illinois, FactoryFix has nearly 650,000 manufacturing professionals in its talent network and is the exclusive recruiting partner of the National Association of Manufacturers, Manufacturing Institute and Creators Wanted. Hundreds of the top manufacturing companies in the country trust FactoryFix to help meet their hiring goals. For more information, please visit https://www.factoryfix.com.

As part of the Creators Wanted campaign, the NAM and the Manufacturing Institute have partnered with FactoryFix, a leading one-stop solution for manufacturing recruitment, to launch Creators Connect.

• The digital career-resources platform aims to address the skills gap and misperceptions about the manufacturing industry, providing manufacturers with a powerful new tool to help build their workforces.

What it is: The platform, which is housed on Creatorswanted.org and powered by FactoryFix, is free to use. It is the first and only unified platform where users can search and explore job openings, career pathways and job training programs across the entire manufacturing sector.

• With more than 400,000 listed job openings, Creators Connect builds on the success of its parent initiative, Creators Wanted, the award-winning, national workforce and perception campaign of the NAM and its 501(c)3 workforce development and education partner, the MI.
• Creators Wanted, which has an email network of more than 1 million students, job seekers and career influencers, aims to recruit 600,000 new manufacturing workers by 2025.
• It is also working to boost the number of students enrolling in technical and vocational schools or reskilling programs by 25% and to increase the positive perception of the manufacturing industry among parents and career influencers.

Why it’s important: “Addressing the workforce crisis is among the top concerns for manufacturers across the country,” said NAM President and CEO and Manufacturing Institute Board Chair Jay Timmons.

• “While we cannot fully solve this challenge without immigration reform, manufacturers are determined to lift up more people in the United States with the promise and reward of modern manufacturing careers—and Creators Wanted’s new digital career resources platform is another way that manufacturers are leading with solutions.”

What’s next: The platform will benefit from FactoryFix’s talent network of more than 650,000 manufacturing workers—and the NAM and FactoryFix are confident it will help fill much-needed manufacturing jobs.

• Said FactoryFix CEO and Founder Patrick O’Rahilly: “As a one-stop recruiting solution for manufacturers to find qualified and engaged candidates, we’re looking forward to increasing our impact in addressing the labor shortage and helping more Americans create their future in modern manufacturing.”

Learn more about how to get the most out of Creators Connect by visiting the FAQ page here. Questions? Contact the Creators Wanted team here.

Marlin Steel Wire Products spent its first 30 years making bagel baskets. When Drew Greenblatt bought the custom wire and metal fabrication company in 1998, he thought it would be making bagel baskets for the next 30 years as well—but soon, international competition changed the math.

“Suddenly, China started manufacturing bagel baskets and shipping them to New York City for cheaper than I could get the steel,” said Greenblatt, Marlin’s president and owner. “But then, we got a phone call from an engineer at Boeing who needed an innovative, customizable basket. And that was the eureka moment.”

The shift: Greenblatt recognized that innovation would help him outcompete foreign companies that could manufacture products more cheaply.

• “We realized we couldn’t thrive in a commodities market,” said Greenblatt. “We had to come up with novel ways to make a basket so that it would make no financial sense to buy from China or Mexico.”
• “We wanted to be able to say to buyers, you must buy from the American innovative company, because we’re coming up with such slick ideas that our product blows the competition away.”

The growth: Today, Marlin Steel is nearly 30 times larger than it was when Greenblatt bought it and heavily invested in research and development.

• “Today, Marlin is 15% degreed mechanical engineers,” said Greenblatt. “We have chemical engineers. We’re coming up with the most innovative racks and systems out there.”
• “People are showing us their operations and asking us to reverse-engineer solutions that will work for them. And we’re doing it.”

However . . . A recent tax change threatens to throttle the company’s progress. Until about a year ago, businesses could deduct 100% of their R&D costs in the same year they incurred those expenses.

• But since last year, a tax policy change now requires businesses to spread their R&D deductions out over a period of five years, making it much more expensive to invest in innovation.

The impact: “Our taxes will be $600,000 higher than they should have been this year—we’ll pay four and a half times more on taxes,” said Greenblatt.

• “What that means is that it makes sense for us not to hire six more engineers. Not to buy three more press brakes [machines for bending metal parts] or hire people to work them. It’s incredibly shortsighted, a horrible policy screwup, and the ripple effects are massive.”

The scope: Greenblatt also emphasizes that the tax change will harm many small businesses.

• “People tend to focus on the bigger companies and how it will hurt them—and it will hurt them—but it will also hurt the little guy,” said Greenblatt. “And the little guy is the job creator in America.”

The last word: “American innovation—that’s our secret sauce,” said Greenblatt. “That’s how we’re going to grow jobs and pay people well and give good benefits and steady employment without layoffs. That’s how we’re going to beat a recession. We need to have the coolest, most innovative products in the world. For us, innovation is key.”

Washington, D.C. – The National Association of Manufacturers will kick off its 2023 Competing to Win Tour on Tuesday, Feb. 21, 2023, traveling to three states and visiting four manufacturing facilities along the way.

The tour will begin in Wisconsin, where NAM President and CEO Jay Timmons will deliver the 2023 NAM State of Manufacturing Address at Husco.

Throughout the week, Timmons will join local manufacturers, employees, media, community leaders and elected officials to discuss the challenging environment facing manufacturers and the urgent need for solutions on issues including immigration reform, permitting reform, workforce development, tax policy and more.

The tour comes as nearly two-thirds of manufacturers are concerned about the challenging economic environment characterized by inflation, supply chain disruption and the workforce crisis, according to the NAM’s latest Manufacturers’ Outlook Survey. More than three-quarters of respondents said pushing back against regulatory overreach should be the top priority of the 118th Congress.

“Our focus on this tour is telling the story of resilient, modern manufacturing—and the tools we need from policymakers to continue leading our economy forward and making the world a better place,” said Timmons. “To unleash our full potential, we need to reinstate critical tax provisions, a smarter, balanced approach to regulations, immigration reform and significant permitting reform, and reject top-down air regulations that cost jobs and snarl supply chains.”

For more than a decade, the annual NAM State of Manufacturing Address has focused the nation’s attention on the industry that is the backbone of the American economy, highlighting the 13 million men and women who are building our future.

The NAM has frequently traveled the country, bringing policy discussions and conversations about the future of work to shop floors, schools, economic clubs, televisions studios, the White House and more.

At a time when the future of work is top of mind for workers and thought leaders alike, the tour will also spotlight the industry’s rapid transformation, while also focusing on manufacturing’s well-paying careers, the industry’s diverse workforce and the real-world solutions for manufacturing’s continued growth.

Tour events will take place in Wisconsin, Indiana and Louisiana. Details are as follows:

Tuesday, Feb. 21 // Wisconsin

8:30 a.m. – 10:30 a.m. CST
Husco
2239 Pewaukee Road
Waukesha, Wisconsin  53188

11:00 a.m. – 12:00 p.m. CST
Waukesha County Technical College
800 Main Street
Pewaukee, Wisconsin  53072

Wednesday, Feb. 22 // Indiana

9:00 a.m. – 11:00 a.m. EST
INCOG BioPharma Services
12050 Exit 5 Parkway
Fishers, Indiana  46037
Timmons will be joined by Sen. Todd Young (R-IN)

Thursday, Feb. 23 // Louisiana

8:30 a.m. – 10:00 a.m. CST
Laitram
200 Laitram Lane
Harahan, Louisiana  70123

2:00 p.m. – 3:30 p.m. CST
McIlhenny Company
Highway 329
Avery Island, Louisiana  70513

MEDIA RSVP: Members of the media interested in covering the tour or attending an event should contact [email protected].

-NAM-

The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs nearly 13 million men and women, contributes $2.81 trillion to the U.S. economy annually and accounts for 55% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org.

A great mentor can make all the difference to your career—especially if you’re in an industry where you may find yourself in the minority. To help women in manufacturing reach their full potential in a male-dominated industry, the Manufacturing Institute’s Women MAKE America program has created a mentorship program, generously supported by its 35×30 Campaign supporters, Dow, General Motors, Arconic Foundation, Alcoa Foundation and Ketchie.

• The program has an ambitious goal: to train more than 1,000 female mentors by 2030 and connect them with younger women in the industry as well as students in colleges, high schools and middle schools.

One year into the program, the participants are already seeing an impact. In a recent Women MAKE webinar, attendees got to hear from one successful and happy mentee, while also receiving guidance on building their own slate of mentors.

Making a difference: “I was especially thankful for the Women MAKE Mentorship Program because it filled a gap in my support system and allowed me to have a mentor who was really dedicated to my professional development,” said Zen Saunders, a 2022 Women MAKE mentee and diversity, equity, inclusion and employee experience leader at Dow.

• Saunders explained that her mentor shared examples of how she built her career, which inspired Saunders to map out her own next steps more creatively. Through regular meetings with her mentor, Saunders learned to find common interests with colleagues and earn their buy-in on new projects.
• “[My mentor has] been an active listener and committed to my success, creating a safe space for me to learn from the challenges that I’ve faced while offering a refreshing perspective that’s uplifting and encouraging,” said Saunders.

Support from Women MAKE: After hearing from Saunders, participants in the webinar were asked to design a personal “board of directors” to mentor them in their own careers. Women MAKE hosts many such activities, which are designed to forge connections between participants and encourage them to think ambitiously about their career paths.

• The board members could be people from participants’ personal or professional lives, instructed MI Director of Women’s Engagement Sarah Shields. An ideal board of directors should include a sponsor, an innovator, an expert, a truth teller and a safe space.
• After they brainstormed a list of people who could fit these roles, Shields encouraged participants to ask these people to act as mentors and to schedule regular times to discuss their career plans.

The last word: “I’m thankful to the Manufacturing Institute for this opportunity and the amazing Women MAKE Mentorship Program. It’s really been a life-changing and transformative experience for me. I highly recommend this program for women and girls currently in or interested in the industry,” Saunders said.

Get involved: In addition to young and senior manufacturing professionals, this year Women MAKE is inviting young women and girls ages 13+ who are interested in STEM, as well as refugees seeking opportunities in the U.S., to join the Women MAKE Mentorship Program.

• If you are interested in joining the Women MAKE Mentorship Program as a mentor, or know of someone who would benefit from becoming a mentee, check out the application. The deadline for applying is Tuesday, Feb. 28.
• You can also tune in to the next Women Connect webinar on “Building Your Personal Brand” on Thursday, Feb. 16.
• And last, if you have questions, please contact the Women MAKE team at [email protected].

Manufacturers have long led the way in efforts to reduce air pollution and improve air quality. Yet, new proposed regulations from the federal government will work against these efforts instead of bolstering them, stymying critical progress and destabilizing economic growth at a time when both are more important than ever.

The challenge: The Environmental Protection Agency is considering a new rule that would impose stricter air standards on particulate matter known as PM2.5 (i.e., particles that measure two and a half micrometers or less in diameter). This rule would enact significant top-down restrictions, forcing manufacturers to change their operations abruptly and without any support.

The reality: For years, manufacturers across all sectors have been developing smart, innovative ways to use energy, water and other resources more sustainably—all while boosting economic growth and creating good jobs at the same time.

• Today, manufacturing in the U.S. is cleaner and greener than at any other time in history, largely due to a revolution in how manufacturers produce, use and recycle energy and resources.
• Across the board, levels of major pollutants have declined dramatically over the past few decades. Thanks to existing regulations and a culture of innovation, the U.S. is far outpacing global competitors in environmental stewardship.

By the numbers: According to the EPA, the U.S. reduced six common pollutants covered by National Ambient Air Quality Standards, including PM2.5, by 78% between 1970 and 2020. In fact, PM2.5 levels alone have dropped a full 44% since 2000.

The impact: These new regulations could be devastating for manufacturers and for the climate. Here are just a few of the negative repercussions:

• An additional regulatory burden on businesses will drain resources from innovative manufacturers, posing additional hurdles to the investment in research and development that fuels progress in energy efficiency and climate action.
• Making permitting harder could also jeopardize new clean energy projects that America needs to address climate change.
• The standards will hinder onshoring, resulting in continued manufacturing abroad—which is less clean than manufacturing in the U.S. The EPA’s proposal undercuts U.S. competitiveness and will not further the goal of global emissions reduction.
• New regulations could damage an already-slowing economy, increasing costs and constraining job growth at a time when Americans are grappling with record inflation.

Our view: Rather than imposing new and unnecessary obligations on manufacturers, the federal government should focus on enforcing the strong regulations that are already in place and give manufacturers the space to find better solutions.

• “The EPA’s announcement . . . [about reconsidering] the PM 2.5 standard will only further weaken an already slowing economy,” said NAM President and CEO Jay Timmons. “Let manufacturers do what they do best: innovate and deploy modern technologies to protect the environment, while creating jobs and strengthening the economy.”

NAM in action: The NAM is rallying manufacturers to speak out against the EPA’s proposal and calling on Congress to oppose these harmful regulations.

• Manufacturers can show their support by sending an email to decision makers in Washington, explaining the real impact of this damaging proposal and urging them to stand up against unnecessary regulations.

Join in: There is an EPA hearing to discuss the proposal on Feb. 21. To participate, be sure to sign up soon—the registration deadline is Feb. 16.

About 30 million people in the United States have a rare disease, according to the National Institutes of Health, which equates to about one in every 10 individuals. Approximately 95% of these rare diseases have no treatment at all—and Ultragenyx, a biopharmaceutical company focused on new and effective therapies for patients with rare and ultra-rare diseases, is working to change that.

• “In the aggregate, rare is not that rare,” said Ultragenyx Executive Director of Public Policy and Public Affairs Lisa Kahlman. “Half of those 30 million people are children. It’s a huge unmet medical need.”

Founded in 2010, Ultragenyx has four commercial products, with about 20 more in pre-clinical and clinical development. But a new change in tax policy poses a very real threat to Ultragenyx’s ability to develop as many treatments for rare diseases as possible.

The issue: Until a year ago, businesses could deduct 100% of their R&D expenses in the same year they incurred the expenses. Starting in 2022, however, a tax policy change requires businesses to spread their R&D deductions out over a period of five years, making it more expensive to invest in growth and innovation. For research-heavy companies like Ultragenyx, that change could divert funds intended for the development of therapies toward tax obligations.

• “Ultragenyx is different,” said Kahlman. “There are a lot of companies that do some work in rare diseases, but usually that’s only a fraction of what they do. We’re exclusively built to focus on rare and ultra-rare diseases, and that requires research.”

The impact: As a small, largely precommercial start-up company that focuses on research, Ultragenyx spends about 70% of its total operating expenses on R&D. In 2021, Ultragenyx spent approximately $497 million on R&D—nearly $150 million more than it earned in revenue.

• If the tax change stands, the company’s financial statement losses, which approximate decreases in the company’s cash reserves, will be adjusted for tax purposes to reflect significant taxable income, resulting in very large tax liabilities over a short period of years.
• This will occur during late stages of the company’s development programs just when costs escalate quickly. Altogether, money will be diverted to taxes and away from critical development programs at precisely the wrong time.

The human cost: If Ultragenyx and other research-heavy biotech companies that are focused on developing treatments for rare diseases must divert funds away from development and toward covering tax obligations, patients living with rare diseases will have even more limited options.

The bottom line: “The therapies we’re developing are really transformational, but in some cases, there might be only about 200 patients in the developed world with one of these diseases—so if we don’t have the money for R&D, there won’t be any incentive for anyone else to develop treatments,” said Kahlman. “For these patients, there is no alternative.”

Our move: At the NAM, we’re pushing Congress to reverse this change and allow manufacturers to invest in jobs, communities and innovation. Learn more and take action at www.nam.org/protect-innovation.

Innovation is getting more expensive—and that should worry all of us.

Until recently, businesses could deduct 100% of their R&D expenses in the same year they incurred those costs. But a tax law that took effect at the beginning of 2022 requires businesses to spread their deductions out over five years instead, driving up the cost of the innovations that keep our economy strong.

At International Paper—an American supplier of renewable fiber-based recyclable packaging and pulp products—that change is causing serious challenges. We spoke to Vice President of Finance and Corporate Controller Holly Goughnour and Senior Director for Government Affairs Kaitlin Sighinolfi to learn more.

Why it matters: “Our company invests in R&D for two main reasons: making better products for our customers and creating safer, more efficient and sustainable manufacturing processes,” said Goughnour.

• “We spend a lot of time and money working to make a better performing, more sustainable and more durable product, but innovation is about more than the product—it’s also about improving the safety and efficiency, and reducing the environmental impact, of our operations.”

The scale: International Paper devotes a significant portion of its resources to innovation, and as a result, the change in tax law has an outsized impact.

• “Much of our free cash flow goes to R&D activities,” said Goughnour. “The change in tax law has resulted in a significant amount of additional cash taxes in this first year, reducing the amount of capital available to invest back into our business, including additional R&D.”

The competition: Goughnour and Sighinolfi also emphasized the need for a tax system that helps manufacturers in the U.S. to compete with companies abroad. According to Goughnour, the new tax change does the opposite.

• “The new tax law enables European and Chinese competitors to accelerate their R&D faster than us,” said Goughnour. “We’re in a global marketplace, and the new tax law puts U.S. manufacturers at a competitive disadvantage.”
• “Almost nobody else in the world has this policy,” said Goughnour. “R&D is an absolute growth engine for the U.S. economy. Why would we have a tax policy that discourages investment in R&D? It makes no sense.”

The last word: “Ours is a supply chain story,” said Sighinolfi. “Innovation should be part of the overall manufacturing value chain, but the new law reduces the value of innovation, slowing investment in innovation and ultimately hurts American businesses, employees and consumers.”